• The objective of the standard is the protection of consumers and the transparency and development of the insurance activity
  • The solvency regime of the entities, the government system and the requirements of information and transparency are developed

The Council of Ministers has approved the Royal Decree on the development of the Law on Planning, Supervision and Solvency of Insurance and Reinsurance Entities. This regulation completes the adaptation of the insurance sector to the Solvency II Directive, already partially transposed by Law 20/2015, of July 14, on the same matter.

The ultimate purpose of the standard is to protect consumers and promote transparency and the development of insurance activity.

The novelties are the following:

  • Solvency regime: The new solvency regime is developed, setting the rules for the proper calculation of technical provisions, the determination, classification and admissibility of own funds and the calculation of the required solvency capital, among others.
  • Special solvency regime: A special national regime is established to which entities that do not exceed certain quantitative limits in their activity and entities with fixed characteristics can apply.
  • Government system: The importance of the governance system of insurance entities is recognized. The general requirements that the government system must meet to guarantee healthy and prudent management of the activity are established. The specific criteria of each of the fundamental functions that comprise it are also detailed (risk management, compliance verification, internal audit and actuarial function).
  • Honorability: the requirements of honorability and aptitude required of the partners who have significant interests in the entity (10%) and those who exercise the effective management or fundamental functions that make up the system of government are developed.
  • Group supervision: Close collaboration is strengthened and requires between the supervisory authorities under whose jurisdiction different entities belonging to the same group operate. This implies the appearance of new figures such as the college of supervisors or the group supervisor.
  • Consumer protection: the policyholder's duty to inform is reinforced, especially with regard to specific regulations in death and sickness insurance.
  • Measures to be taken in situations of financial deterioration: the content of the recovery plan and the short-term financing plan that entities must present when their eligible own funds are not enough to cover the required solvency capital or the minimum mandatory capital, respectively, are regulated.

Additionally, through the additional and final provisions the registration of compulsory insurance and modify other standards such as the Social Security Mutual Insurance Regulation, the Extraordinary Risk Insurance Regulation and the Pension Plans and Funds Regulation. In addition, the necessary adaptations are made in the Accounting Plan of the Insurance Companies

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